Egypt is one of the largest car fleets in Africa, with over 6 million vehicles (80% passenger cars) on its roads. According to this search, most used cars; Their ratio with new vehicles is 3: 1.
The used car market is not only huge in Egypt. It is the same in almost every ‘large population’ country in the world. Recently, this market has undergone rapid digitization, with several startups taking on responsibilities such as Classifieds and hoping to define a new era of used car-selling platforms. Some include Cazoo in the UK, Cars24 and Spinny in India, InstaCarro in Brazil and Cavac in Mexico.
Cairo-based Sylndr is a new player in a market where unorganized dealers and classified sales dominate the volume. The automated marketplace has collected $ 12.6 million in pre-seed rounds where customers can sell and buy used cars – Mena and sub-Saharan Africa, its largest, 20-minute startup startup Rabbit. Last November.
Saudi-based early-stage venture capital firm RAED leads the venture round. VC firms involved Algebra Ventures, Nuwa Capital, 1984 Ventures, and Global Founders Capital, as well as a number of regional and global angel investors.
New cars cost more; This is an explanation especially for the huge demand for used vehicles in emerging markets. In Egypt, popular brands such as GB Auto, Mansur Automotive and Nissan are generally known for their good resale value. But in classifieds, the experience of buying such a car is less due to a number of problems like lack of trust and affordability.
Omar L. Defraui, co-founder and CEO of TechCrunch, said in an interview that “the main problem we are trying to solve in Egypt is complete mistrust between buyers and sellers of used cars in the market.” “It simply came to our notice then. Our vision as a company is to quickly become the most trusted used car retailer in Egypt and the region. “
Popular car models in Egypt cost around $ 15,000 on average. For many Egyptians, who earn less than that annually, this is enough to participate. And unlike developed countries where systems are in place to help people finance vehicles, it is almost non-existent in developing markets like Egypt, where only 5% of used cars are financed.
“So imagine if you could enable financing and make cars more affordable to people, this would be a great price proposition we would like to send,” added El Defraui, who founded the cylinder with Amr Mazen in November 2021.
Sylndr has not yet been launched to the public. However, it is building its model after Cars24 in India: buying cars from people who want to sell them, buying them at a reasonable price, re-conditioning them and then reselling them to new owners. According to the founders, they will also offer users a seven-day warranty associated with a variety of long-term financing options.
The car retailer will first launch to the sellers and update its car list. Cylinder plans to open the platform to buyers this year or in the first quarter of 2023, Mazen said.
Car repair between these two events. From our conversation, it seems that a refurbished car in the cylinder will be a little more expensive than the unmodified cars found in classifieds like OLX and Contactcar. But the chief executive argued that the Sylndr offered a “fair and competitive price” and that customers would still prefer cars on the Sylndr based on quality and speed.
“It doesn’t matter if the price is high; It’s a matter of paying the price. If you’re a consumer with no car experience, you’ll want to buy something that really pays for the amount you pay, “said El Defraui. “Consumers buy used cars and try to repair them themselves, but no one has that experience. That’s the decent thing to do, and it should end there. “
Image Credit: Sylndr
Pre-revenue startups want to make money from retail sales, auction houses, dealerships and B2B sales. El Defrawy said Sylndr may also see interests in ancillary revenue streams such as financing, insurance, fees from roadside assistance and other value-added services. “We’re looking to develop that on the go,” he said.
Prior to starting Sylndr, El Defrawy worked for six years as an investment banker at EFG Hermes and one year as CFO of Egyptian food startup Elmenus. With Souq.com, Hello Fresh and Cazoo, Mazen has experience delivering food and across the e-commerce sector. They attribute the background to their background, the make-up of their 40+ team, and the intensive nature of Sylndr’s market capitalization to the reason behind raising this large pre-seed round, although venture capital is said to have cooled under public sale-off and devaluation of tech companies.
“The secondary car market is extremely fragmented and not often, consumers do not have a reliable competitor,” says Omar A. Almazdui, managing partner of RAED Ventures, said in a statement:
“The market is huge, ripe for disruption, and we’re excited to be part of the cylinder ride because they’ve been transformed and set a whole new standard for the used car market. Given the team’s unique background and experience, we believe in their ability to crack this business model. “
The founders say the investment proceeds will be scaled up to the company’s performance, technology infrastructure, growing inventory and its retail and non-retail channels to customers. In a statement, Cylinder said it plans to more than double the size of its team by the end of the year. The company will face competition from the choice of AutoCheck, a Nigerian-based automated platform that recently entered North Africa through an acquisition.